Seasonal businesses can be broadly referred as those businesses which deal in seasonal products and services and are active during those seasons especially in terms of generation of sales. Some popular forms of seasonal business are wedding planning, travel, and tourism, agriculture, floriculture and gardening, tax consultation, summer camps etc. During the peak seasons, these businesses flourish, become visible and remain vibrant. However, during the off-peak seasons, they fold up their operations and go home bound waiting for the next season when the demand for their products and services are active again.
Complexities of seasonal business
Managing a seasonal business can be a whole lot trickier than what it appears on the surface. For seasonal businesses, revenue is generated only during a part of the year. If it fails to create surpluses or generate sufficient revenue in the active period, it will put the business in a financial doom for the rest of the year and hamper its ability to come back to business in the next season. Secondly, the entire process of recruitment and training has to be repeated; to prepare the necessary workforce and make the teams ready for business. Thirdly, inventory surpluses, if any, becomes a burden which either has to be disposed of at throw-away prices or will go down the drain. Last but not the least; seasonal businesses cannot afford to have bad debts or a risky credit cycle. This necessitates that the ups and downs of a seasonal business are effectively and efficiently managed.
Advance manpower planning
Finding seasonal workers could be a challenge as people prefer and engage in regular employment for a regular source of livelihood. As a result, the skills and expertise required in seasonal business are also limited. Therefore, seasonal business enterprises should identify the potential pools of recruitment in advance and maintain a detailed database of existing as well as potential workers and employees. Another alternative is engaging HR consultants to outsource the recruitment and training process. The hiring process should start well ahead of the seasonal business so that possible delays in recruitment are prevented and employees and staff could be provided with the necessary training.
Offseason marketing activities
The offseason period is a great time for seasonal businesses to lay a strong marketing foundation. During this period, the owners have sufficient time in their hands to conduct extensive market surveys and make use of the tools of retail analytics and business analytics for a better understanding of customer behavior, customer demographics, identification of new market segments and product development. This is also an ideal time to engage in brand promotional activities, identify new technologies which could be incorporated into business, work on new delivery models and improvise channel management.
Seasonal businesses cannot afford to have any degree of leniency in its inventory management as the business operational period is limited and the purchased stock has to be sold out or utilized within this time frame. Highly accurate demand forecasting is a necessity for seasonal businesses to make purchase decisions. Logistical arrangements have to be made in such a way that the inventory holding and transportation costs are at the optimum level.
Strict and prudent with money
The show time is very limited for seasonal businesses. The revenue target has to be achieved within the business season. It becomes extremely important to exercise strict control over the inflow and outflow of cash. Credits and accruals expose seasonal businesses to financial risks and unplanned operational costs. The time available to achieve a healthy ROI is also very limited which necessitates that the revenue and cost projections are accurate and realistic which in turn has a direct bearing on the profitability of the business.
SOP development in advance
Because of the limited time factor, seasonal businesses have to operate on zero margins of error. Any flaw in planning or execution may result in operational halts or even worse, revenue losses. In order to minimize the chances of the occurrence of any operational halts, seasonal businesses must incorporate SOP (Standard Operating Procedures). Having SOPs will help ensure that the day-to-day business activities and operations are executed by the employees as per the laid down standards in a streamlined manner. To know more about SOP development, these blogs can be helpful – SOP (Standard Operating Procedures), How to write (SOPs) for Sales / Retail?
Repair and maintenance
Like any other business, seasonal businesses also make use of various assets like manufacturing and packaging machinery and equipment, vehicles, computers and printers, CCTVs, POS machines, power generators and other electrical devices, software applications, furniture, and paintwork etc. The offseason period is an ideal time for the repair and maintenance work and upgradations of these assets which may not be feasible during the active business season.
Seasonal businesses are often exposed to business risks emanating from its environment. These risks may include poor weather conditions, general economic slowdown, and a slump in market demand; cost escalation, regulatory changes etc. Although not all kinds of business risks can be covered, a seasonal business insurance policy can shield organizations from several forms of business risks. The nature of business risks which can be covered or insured may vary from policy to policy.
Complementary offseason business
Having an alternate but complementary business for the offseason period offers an indirect form of insurance against the seasonal business risks and provides a source of revenue which can be used to boost up the core seasonal business. In this way, seasonal businesses can also retain the trained workforce, continue with a coalesced marketing strategy, ensure a steady flow of revenue and prevent financial shocks and optimize inventory.
Evidently, seasonal businesses go through a rollercoaster ride through the year or through the seasons when it comes to market demand, business activity, and sales. The strategy of seasonal business enterprises should be to plan, prepare and organize during the offseason period covering all the areas of management and go full throttle with their best to make the most out of the peak seasons.
About YRC: YRC is a Management Consulting Company with head office in Pune, India. We work across 03 verticals, Startup, SME & Corporates. Our expertise lies in developing Standard Operating Procedures (SOPs) for companies and helping them organize and expand. We have a cumulative experience of more than 15 years. Our holistic approach helps us to devise the best of the management practices for the organization.
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Keywords: How to write (SOPs) for Sales / Retail?, Standard Operating Procedures, retail analytics
By: Rupal Agarwal
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